Nigeria has Africa's largest mobile market, with more than 140 million subscribers and a penetration above 100%. The rapid growth has led to problems with network congestion and quality of service, prompting the telecom regulator to impose fines and sanctions. Network operators invest billions of dollars in base stations and fibre optic transmission infrastructure to support the ever increasing demand for bandwidth.

Efforts are also being made to encourage infrastructure sharing and to outsource the management of towers to third parties. Much of the remaining addressable market is in rural areas where providing network infrastructure and operations is expensive. In combination with falling ARPU, this is forcing network operators to streamline and to develop new revenue streams from mobile broadband and data services such as m-payments and m-banking.

Although the market is one of the most competitive in Africa, the industry regulator is tightening price caps and mandating further reductions of interconnect rates. Following years of delays, Mobile Number Portability (MNP) was finally introduced in 2013, promising to make the market even more competitive. The terrorist group Boko Haram has created difficulties for network provision and maintenance in the northern states, a difficulty which neither the government nor operators are properly positioned to address.

Key developments:

Auction for spectrum in the 2.6GHz band postponed for a second time; additional 79 BTS installed under the USPF program; Airtel Nigeria sells 4,800 towers to AMC; Smile Communications extends LTE; government cracks down on substandard mobile devices; CDMA operators stop trading following financial difficulties; Etisalat sells its 2,136 tower infrastructure; tens of thousands of new base stations to be built; major network management contracts signed; mergers and acquisitions among smaller operators; regulator cracks down on poor quality of service; new price caps and lower interconnection rates; Mobile Number Portability introduced; report includes operator data to Q4 2014, regulator's market data updates to January 2015, recent market developments.